Rensselaer Union, Volume 10, Number 40, Rensselaer, Jasper County, 20 June 1878 — Fiat Money. [ARTICLE]

Fiat Money.

Wo find tlie following in (lie Terro Haute Express, the organ of tlio fiat mvneyUtf and inflationists in this slate: ‘■Tlie Indianapolis Journal him, ignored two or three little .juystioiiH which wo put it. Wo will repeat thorn, raising our voice a little louder for the Journal to hour: “If tlicro is nothing in ‘lint money’ why is it that the ‘flat’ of our government mnkes an American silver dollar worth one hundred cents while the Mexican dollar, with three grains moro of Bilvcr, is worth but ninety-three cents? “Why is it that the ‘fiat’ pf the 'governmeut makes a hundred cents of 88.} cents’ woith of silver coined into two half dollars? "Why ia it that the ‘fiat’ of the government makes five cents of seven eights of a cent’s worth of nickel?”

We bail not noticed (he inquiries In tho Express before, and had not apposed that it desired any ini formation on the financial question. Our impression htis been that the Express was of the opinion that its stock of knowledge on this subject was complete, and that so far us acquiring further information wus concerned tho books were closed. But if it really wishes information in regard to the above points we will endeavor to accommodate it. It irticsl: First—“lf there is nothing in ‘fiat money,’ why is it that the ‘flat’ Of our government makes an Amcrcan silver dollar worth one hundred cents, while the Mexioan silver dollar, with three grains more of silver, is worth “but ninty-three cents?’’' Silver is a precious metal. The American stiver dollar contains 412 J grains of silver and the Mexicaus dollar a few grains igore. Both represent labo'r, and have intrinsic value. In addition to its intrinsic value the American dollar is a legal tender for all debts, public and private, and is also in constnut demand as a convenient coin and medium of exchange. These qualities, added to its intrinsic value, give it currency as a dollar, 'J'he Mexican dollar is legal tender for nothing. Tho American dollar has a bullion value of say ninety-three or ninety-four cents, and the legal-tender quality gives it the rest. The fiat moneyists propose to paint and print a piece of worthless paper, give that a legal-tender quality, and call it a dollar. The silver dollar consists of ninety-four hundredths real value and six hundredths legal-tender value. Your painted paper “fiat” dollar would have jij real value whutover, and only such legal-tender value as could be given to u worthless piece of paper, that is, none at all. The greenback doller is not “fiat” money. It is redeemable in coin, and its redeemability is what gives it value. Its value has always varied just in proportion to the prospect of its redeemability. It bore to stamp and “fiat’’ of the government during the war as much as it does now, yet in July, 1864, It took $276 in greenbacks to equal SIOO in gold. The value of the greenback depends on its redeemability in com, and that of the silver dollar mainly on its bullion value. The “fiat” of the government is a small element in the value of either.

Second—“ Why is it that the ‘fiat’ of the government makes a hundred cents of eighty-eight and oue-half cents’ worth of silver, coined into two half-Jollars?” Ono who will read what goes before will hardly need an answer to this question. Silver half-dollars have a real value, a legal-tender value to a certain amount, and an added value on account of the demand for them as “change.” Eighty-eight percent, of the silver half-dollar is real value, while the remainder is due to legal tender and popular demand. The fiat moneyists propose to stamp a worthless piece of paper as legal tender, and expect popular demand to make it worth a dollar. Third—“ Why is it that the ‘flat’ of the government makes five cents of seveneighths of a cent's worth of nickle?” The tive-ccnt piece is composed of seventy-five per cent, copper and twenty-five per cent, nickle. It is redeemable at the United States treasury in when presented in sums of not less than one hundred dollars, and is a legal tender at its nominal value for any amount not exceeding twenty-five cents. Thus, as in the other eases, its intrinsic value is snpplirnented by a legal tender quality aud popular demand. The intrinsic value of the nickle, small as is, is greater than that of the piece of paper which the fiat moneyists would stamp os a dollar. In fact, they would take four pieces of precisely the same size, print different pictures on them, and call one one dollar, another five dollars, another ten, and another tweuty. None of them would have as much intrinsic value as a copper cent. None of them would be redeemable or convertible into coin. They would actually be worth no more than the slips of paper which little boys issue as circus tickets and mark “five cents.” The greenback Is a promise to pay in coin, and therefore approximates coin in value as the prospect of redemption iocraases. “Fiat” lAoney would have no value ol its own and no redeemable value. It would bo a disgrace to tlio government, a curse to the people, and a laughing stack for the whole world. —lndianapolis Journal.